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Winemakers told to stop whining

Greg Roberts

Local wine makers must stop whining about the high Australian dollar and back themselves to win their share of global sales, says producer Australian Vintage.

The company said on Tuesday that it had secured an extra $5 million a year in cashflow by striking new average six-year lease deals on its NSW and South Australian vineyards at a 32 per cent reduced cost.

However, Australian Vintage chief executive Neil McGuigan said the industry had been a tough one for local producers to succeed in recent years, due largely to over-supply.

Its share of exports had declined and was Australia's sixth largest agricultural export in 2011, earning $1.92 billion down from about $2.24 billion.

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At the same time Australia made great wine and it was up to local wine makers to be innovative and creative to convince foreign consumers of that, Mr McGuigan said.

"You've got to make the wine the hero," he told AAP.

"You can keep on saying you will wait for the exchange rate to change to fix the financial woes of the wine industry... you can come up with all the excuses.

"But look at the positives the wine industry has: Australian wine even at the dollar we have is arguably the best value wine in the world.

"Be innovative with wine styles ... if you don't go and plant other varieties and keep whining and whingeing then Spain and Argentina will have a bit of a spike."

Mr McGuigan said his company had done exactly that, launching a semillon blanc to take on New Zealand's dominance of that area in the United Kingdom.

It was also targeting the low alcohol wine segment in the UK, where tax breaks existed.

The comments echo similar sentiments made recently by global giant Treasury Wine Estates' boss David Dearie, who criticised the Australian wine industry for a lack of innovation.

Australian Vintage's chairman Ian Ferrier also warned that the oversupply issues that had crippled the industry still existed, despite having subsided recently due to a weak harvest in Europe this year.

European wines tend to be sold for less than Australian wines, with the high dollar and rising production costs including electricity impacting.

Mr McGuigan said he had been able to negotiate the lower lease costs with respect to global over-supply issues, while securing the quality of its own grape supply.

Australian Vintage has signed a deal with Belvino Investments and QWIL Investments on vineyards supplying 45,000 tonnes of grapes.

Belvino and QWIL would also contribute $3.45 million towards redeveloping ageing vineyards and permanent water purchases to drought-proof wineries.

Australian Vintage brands include McGuigan, Miranda, Nepenthe and Tempus Two.

The company's shares were up more than three per cent at 49 cents at 1440 AEDT.